Finance Bill will hit sector hard, warn aviation industry players

Local aviation and logistics industry players oppose clauses in the Finance Bill that remove tax exemptions for airlines.[File, Standard]

Local aviation and logistics industry players have opposed clauses in the Finance Bill that remove tax exemptions for airlines. They warned that a high tax regime could result in a major setback for the sector by slowing down aircraft fleet modernisation while also hitting exporters of key commodities with higher costs. 

This year’s Finance Bill seeks to reintroduce 16 per cent VAT on aircraft and parts as well as the Import Declaration Fee (IDF) and Railway Development Levy (RDL) on imported aviation technical components, which the Kenya Association of Air Operators (KAAO) said will inflate capital and maintenance expenditures.